A few weeks ago, I was asked to lunch by the tenant that recently moved into the extra apartment in our Hampton Park Terrace house. He's an equities trader and does some real estate development on the side. Great guy, and very smart.
We met at Five Loaves at Cannon and Coming Streets, then walked down to see a couple of properties that he owns. One Charleston single house, just to the east, was perfectly standard stuff for Cannonborough: a typical college rental house. Back to the west we walked to see his other property. I was sort of walking with my head down or looking to the front as we chatted. Then he stopped and said "This is it." I looked to the left, and said "This one?" No, over there.
I looked to the right and across the street. "Whoa! Holy sh*t!"
A relatively large wood framed house was up on timber cribbing over a huge excavation. Within the hole, the form work for the cast-in-place concrete walls of a basement was in place, ready to be poured shortly thereafter. I had never seen anything like this done in Charleston, and was naturally very curious about it.
It is an interesting story that takes place at the confluence of historic preservation ordinances, zoning regulations, flood zone restrictions, and an expanding real estate market.
In brief, the builder/developers purchased a couple of adjacent properties: 68 and 70 Cannon Street, which collectively had 3 historic structures. Some combination of the Charleston Board of Architectural Review and Board of Zoning Appeals denied applications to add onto the residences conventionally for greater rental capacity that the owners desired. But it just so happened that the flood zone boundary ("A-Zone" to "X-Zone") crossed right at the front of the properties. The front of 68 Cannon sat about 2' into the A-Zone, with the balance in the more favorable X-Zone. If they could move the structure back a couple of feet, they would no longer be under strict flood regulations.
Being out of flood restrictions that would prevent a basement meant that they would be able to create a basement if they wished, and were able to achieve their expanded rental capacity that way. The need to completely rebuild the crumbling foundations anyway meant that the cost difference to go with the basement was decreased. Cost analyses yielded a return on investment that made a great deal of sense. So a basement they dug.
What about the practical considerations of flooding in the basement of a Charleston residence? Wary and prepared for this, the developers engineered, and then expanded, a deep sump system to drain the site of rising water in perpetuity. An extremely wet summer was not enough to overwhelm their system, so they feel confident in the ability for the drainage system to keep up.
Very interesting stuff, and a definite harbinger of things to come for the Charleston real estate market. We may not have a lot more basements built, but the idea that it makes sense to do it should make you stop and think about where the market is heading.